Low interest rates are working to support economic activity in Australia and there is little concrete evidence that policy is less effective than in the past, a top central banker said on Monday.
Reserve Bank of Australia (RBA) assistant governor Christopher Kent also reiterated that a further drop in the local dollar was both "likely and necessary" to support demand and help offset lower commodity prices.
Speaking at the Australian National University, Kent addressed concerns that low rates were having less of a stimulative impact than in the past.
"Monetary policy is clearly working to support demand, although it is working against some strong headwinds," said Kent.
The RBA cut rates to an historic low of 2 per cent last month in an effort to help revive a sluggish economy, and has left the door open to further easing if needed.
Kent said low rates were driving strong growth in home building, which was supporting consumption and employment.